We’ll leave the ‘stupidity markets’ alone today as it has long since been proven that market performance has no relationship to economic reality. A fact that will only get more disturbing as time goes on.
Instead we will start with two very different tales about the ‘be-all, end-all’
As Bank of America executives prepared last week to announce the first phase of their turnaround plan, a group of consultants hurried to complete their recommendations for the overhaul, called Project New BAC.
The 44 senior bank managers and roughly two dozen consultants assigned to the initiative worked through lunch, barely pausing to enjoy the pepperoni, sausage and vegetarian pies that had been ordered from a pizzeria.
On Monday, the bank’s chief executive, Brian T. Moynihan, announced the broad strokes of their five-month effort, announcing plans to eliminate 30,000 jobs and cut annual costs by $5 billion over the next three years.
“We don’t have to be the biggest company out there. We have to be the best,” Mr. Moynihan said.
The consulting firms enlisted to help with Project New BAC — EHS Partners and the Promontory Financial Group — are what are known in the industry as bank doctors. Financial firms often turn to these specialists in periods of crisis, seeking out their recommendations on deep and wide-ranging cuts to bolster revenue and eliminate unnecessary expenses.
Bad enough BOA, er, ‘allowed’ Countrywide to be palmed off on them but then they kept it…what the hell were they thinking?
Okay, let’s suppose there is still tons of ‘counter-party risk’ hidden under the Countrywide umbrella so scuttling it isn’t an option, is scuttling the economy the answer?
Left to our imagination is precisely what BOA is trying to be the best at, are they trying to be the best ‘smoking hole in the ground’? (Because that’s where they’re headed!)
Now wait a minute…if all money is ‘funny’ then why don’t the banks just print their way out of this? (which, on the surface, appears to be my solution, it isn’t!)
It may also puzzle some of you, considering my steadfastness in insisting all money is funny, that I also insist there is no possible solution to the current quandary (short of absolute Jubilee, the infamous ‘re-set button‘)
You might also be puzzled as to why I insist that a jubilee without altering the current set-up is nothing more than a temporary fix, in a matter of months we will be right back where we started…if all money is funny.
Upon reflection this is probably only going to muddy the waters worse than they already are.
Anthropologists gradually fanned out into the world and began directly observing how economies where money was not used (or anyway, not used for everyday transactions) actually worked. What they discovered was an at first bewildering variety of arrangements, ranging from competitive gift-giving to communal stockpiling to places where economic relations centered on neighbors trying to guess each other’s dreams. What they never found was any place, anywhere, where economic relations between members of community took the form economists predicted: “I’ll give you twenty chickens for that cow.” Hence in the definitive anthropological work on the subject, Cambridge anthropology professor Caroline Humphrey concludes, “No example of a barter economy, pure and simple, has ever been described, let alone the emergence from it of money; all available ethnography suggests that there never has been such a thing”
a. Just in way of emphasis: economists thus predicted that all (100%) non-monetary economies would be barter economies. Empirical observation has revealed that the actual number of observable cases—out of thousands studied—is 0%.
b. Similarly, the number of documented marketplaces where people regularly appear to swap goods directly without any reference to a money of account is also zero. If any sociological prediction has ever been empirically refuted, this is it.
Forgive me good citizen, adding to the mystery of ‘where did money come from?’ does nothing to clarify our current dire predicament.
It’s not how much money there is, it is money’s failure to circulate that has doomed our (current) civilization/social model!
Here is the problem there’s no way out of, short of cutting everybody a big fat check. When all/most of the money in an economy is ‘stuck’ at the top, printing more does you zero good.
Thus do I reiterate, there is NO WAY OUT (via ‘fuck you, pay me’ capitalism.)
The ‘mystery’ of money is actually solved by the leisure class who needed a way to pick the public’s pocket, an answer that should be obvious by the inevitable linkage between money and government.
Oh let us not forget that oxymoron ‘poor politician’, there’s no such thing.
In fact, Adam Smith was also ‘wrong’ in asserting that commerce/free trade produced the ‘wealth of nations’, the true wealth of nations flows from the public teat!
The biggest fortunes in the world were created at ‘the public’s expense’.
Even Bill Gates owes the bulk of his wealth to government contracts.
So with the recent statistic of the top 5% accounting for 40% of consumer spending should provide you with all of the evidence you need to understand what is wrong with our economy…
Ironically, it also contains the answer to what we need to do about it.
Thanks for letting me inside your head,
Gegner
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